Dubai gold prices set to end the week lower
24-karat gold slides Dh40 in 28 days, down from Dh554.50 on Aug 27 to Dh514.50 on Friday
Dubai: Gold prices have had a tough week as elevated energy prices and inflation concerns drove bond yields higher and fuelled expectations of another Fed hike. In the UAE, prices of 24-karat gold have remained the same at Dh514.25 versus the pervious day’s close.
If you were to compare gold prices in the last 28-days, prices have fallen sharply, where 24-karat gold was prices at Dh554.50 on August 27. That’s Dh40 difference in a span of nearly a month. As of Friday, 22-karat gold in Dubai is trading at Dh476.25 and 14-karat gold is now inching closer to the Dh300 mark at Dh305.25 per gram.
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External factors impacting gold
Gold ticked up on Friday, approaching $4,300 an ounce, though it remained roughly 2% lower than the previous Friday. Oil, meanwhile, pulled back after climbing over 7% across the prior two sessions, amid reports that negotiators were considering a phased arrangement in which Iran would reopen the Strait of Hormuz in exchange for the US lifting a port blockade.
Gold's recent moves have largely tracked energy prices and growing bets on further Fed rate increases. Rising borrowing costs tend to weigh on bullion, since it generates no yield of its own.
No slip in demand
“Gold remains comfortably above the June-July lows near $ 4,000, despite a substantial deterioration in its traditional macro drivers. More importantly, there has so far been little evidence of the kind of investor liquidation that would normally accompany such a sharp rise in real yields”, says Ole Hansen, Head of Commodity Strategy, Saxo Bank, who also points to Chinese demand not bending as another factor that can keep gold propped up.
Despite near-term headwinds, many investors are still betting it will grind higher as it rediscovers its traditional value as a portfolio hedge.
Spot gold rose 0.02% to $4,263.34 an ounce at 09:30 am in Dubai. Silver was up 0.01% at $63.55 an ounce but on track to end the week more than 3% lower. Platinum edged higher and palladium fell. The Bloomberg Dollar Spot Index, a gauge of the US currency, was steady after five days of gains.
